Correlation Between Zhihu and 871911AT0
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By analyzing existing cross correlation between Zhihu Inc ADR and US871911AT09, you can compare the effects of market volatilities on Zhihu and 871911AT0 and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Zhihu with a short position of 871911AT0. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhihu and 871911AT0.
Diversification Opportunities for Zhihu and 871911AT0
Very good diversification
The 3 months correlation between Zhihu and 871911AT0 is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Zhihu Inc ADR and US871911AT09 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US871911AT09 and Zhihu is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Zhihu Inc ADR are associated (or correlated) with 871911AT0. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US871911AT09 has no effect on the direction of Zhihu i.e., Zhihu and 871911AT0 go up and down completely randomly.
Pair Corralation between Zhihu and 871911AT0
Allowing for the 90-day total investment horizon Zhihu Inc ADR is expected to under-perform the 871911AT0. In addition to that, Zhihu is 5.33 times more volatile than US871911AT09. It trades about -0.03 of its total potential returns per unit of risk. US871911AT09 is currently generating about 0.05 per unit of volatility. If you would invest 9,158 in US871911AT09 on October 9, 2024 and sell it today you would earn a total of 541.00 from holding US871911AT09 or generate 5.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 35.76% |
| Values | Daily Returns |
Zhihu Inc ADR vs. US871911AT09
Performance |
| Timeline |
| Zhihu Inc ADR |
| US871911AT09 |
Zhihu and 871911AT0 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhihu and 871911AT0
The main advantage of trading using opposite Zhihu and 871911AT0 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhihu position performs unexpectedly, 871911AT0 can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in 871911AT0 will offset losses from the drop in 871911AT0's long position.The idea behind Zhihu Inc ADR and US871911AT09 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 871911AT0 vs. WPP PLC ADR | 871911AT0 vs. CarsalesCom Ltd ADR | 871911AT0 vs. Radcom | 871911AT0 vs. Xunlei Ltd Adr |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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